Behind the Lines

Caving to an international pressure campaign, Nestle in January withdrew its claim for $6 million from the Ethiopian government.

The company was seeking compensation for an Ethiopian business of Nestle's which was nationalized in 1975. The government sold the firm to a local company in 1998 for $8.7 million.

Ethiopia had offered to pay $1.5 million to settle the claim, but the global food giant initially rejected the offer.

Ethiopia is now facing a major famine, with millions of Ethiopians now reliant on emergency food aid. According to Oxfam, the $6 million initially sought by Nestle would be enough to feed a million people for a month.

"This is a question of principle," Francois Perroud of Nestle told the Guardian of the UK in December, indicating the company would not back down.

Humanitarian groups contrasted the desperate poverty of Ethiopia -- the poorest nation in the world with a per capita GDP of $100 -- with the immense wealth of Nestle, which earned $5.5 billion in profits in 2001.

An Oxfam-led campaign directed 40,000 protest letters to Nestle, leading the company to capitulate.

In January, the company entered into an agreement with Ethiopia. The government agreed to pay $1.5 million, and Nestle agreed "immediately upon receipt [to] contribute the entire compensation exclusively in the territory of Ethiopia to deal with the hunger crisis."

In a statement, Oxfam called on Nestle to do more to alleviate the suffering in Ethiopia. "The severe hunger and poverty in Ethiopia have been caused partly by debt and drought but also by unfair trade," the group stated. "Ethiopia relies on foreign sales of its coffee crop for two thirds of its income. In the past three years, world coffee prices for farmers have fallen by 50 percent and yet giant coffee companies like Nestle continue to make handsome profits. Nestle should follow up today's deal by taking action to ensure that coffee farmers are paid a decent price."

Protecting Eli Lilly

Consumer advocates denounced passage in November of provisions in the Homeland Security bill that provide an array of corporate special interest provisions. The Senate defeated by 52-47 vote an effort to remove the special interest protections.

"While similar to bailouts requested by a host of major industries that demonstrated their post-September 11 patriotism by asking to loot the federal treasury, this bill contains cruel provisions that take away the rights of children who have been harmed by drug companies," says Joanne Doroshow, executive director of the New York-based Center for Justice and Democracy. "These measures have nothing to do with terrorism or national security."

Among the measures that raised the hackles of consumer groups:

A provision giving the Secretary of Homeland Security sweeping authority effectively to immunize from lawsuits makers of any products deemed "anti-terror technologies," so determined under vague standards.

A provision secretly added to the bill that wipes out lawsuits brought by parents for damage caused by thimerosal, a mercury preservative in infant vaccines manufactured by Eli Lilly and others, that has been connected with autism. No member of Congress has acknowledged adding this provision.

Liability limits on airport-screening companies that were on duty on September 11.

Democracy Hog-Tied

A federal judge in Des Moines in January struck down an Iowa law prohibiting pork processors from owning hog farms.

Judge Robert Pratt ruled in favor of Smithfield Foods, the world's largest pork processor, calling the Iowa law an unconstitutional interference with interstate commerce that discriminates against out-of-state economic interests.

The purpose of the law is to block pork processors from competing directly with hog farmers. If packers can own farms, they are likely to buy from their own farms, and put independent owners out of business. This has been the experience in the poultry, hog and cattle markets [see "In Firm Control: Industrial Concentration in the U.S. Livestock Market," Multinational Monitor, July/August 2000].

Warning that Pratt's ruling endangers small farmers, Craig Lang, president of the Iowa Farm Bureau says that "currently, four major beef packers control 82 percent of the slaughter and the five largest pork processors control more than half of the swine slaughter. These numbers will only increase if steps aren't taken to limit packer ownership of livestock."

"We are disappointed in the Court's ruling," says Iowa Attorney General Tom Miller. "We argued strongly that Iowa's law is constitutional, that it makes no distinction between in-state and out-of-state swine processors, and that the Legislature's stated purpose -- to preserve free and private enterprise, prevent monopoly, and also to protect consumers' -- is legitimate and not discriminatory."

Iowa Senators Tom Harkin and Charles Grassley have pushed for a nationwide ban on packers owning livestock, and managed to have a bill pass the Senate. The House of Representatives failed to pass a similar measure